U.S. Justice Department leaders doubted that a lawsuit to overturn marijuana legalization in Colorado and Washington state would succeed, so they felt they had little choice but to accept the laws, a senior official told the U.S. Senate Judiciary Committee on Tuesday.<\/p>\n
Also at the hearing, Deputy Attorney General James Cole said his department is working on a solution to the banking problem that is plaguing marijuana businesses around the country. Because the drug is still illegal under federal law, banks won\u2019t deal with pot shops, forcing them to keep tens of thousands of dollars of cash on hand.<\/p>\n
\u201cObviously, there is a public-safety concern when businesses have a lot of cash laying around,\u201d Cole said.<\/p>\n
Justice Department officials are talking with bank regulators about ways that banks could do business with marijuana shops using laws that are on the books today, Cole said.<\/p>\n
Cole signed the Justice Department memo last week that said federal officials won\u2019t try to overturn the legalization laws in Colorado and Washington \u2013 or target marijuana businesses for prosecution \u2013 as long as the states had strict rules that businesses are following.<\/p>\n
Federal goals are to keep marijuana away from children, confine it to states where it is legal, and keep criminals out of the pot business, Cole said.<\/p>\n
But Sen. Charles Grassley, R-Iowa, hammered Colorado for its failures to enforce medical marijuana regulations. He said about a third of the marijuana in his state can be traced to Colorado.<\/p>\n
Grassley also cited state audits that showed the Colorado Department of Revenue botched its enforcement of medical marijuana businesses, while the state health department has been lax about overseeing doctors who recommend pot.<\/p>\n
\u201cWhy has the department (of Justice) decided to trust Colorado to effectively regulate recreational marijuana when it\u2019s already struggling to regulate medical marijuana?\u201d Grassley asked Cole.<\/p>\n
Cole said the federal government probably wouldn\u2019t succeed in a lawsuit that tried to force states to pass a law \u2013 in this case, criminalization of marijuana.<\/p>\n
The next alternative was to target the states\u2019 enforcement rules as a violation of federal law. But that strategy has big problems, too.<\/p>\n
\u201cIf we just went after their regulatory scheme, instead of having a bad one, they\u2019d have no regulatory scheme,\u201d Cole said.<\/p>\n
Not everyone agrees.<\/p>\n
Kevin Sabet, who is a legalization critic and director of the University of Florida Drug Policy Institute, argued in favor of a federal crackdown on Colorado and Washington before more states and businesses get into the pot industry.<\/p>\n
\u201cBy threatening legal action, the administration can prevent the large-scale commercialization and retail sales of marijuana,\u201d Sabet said.<\/p>\n
Jack Finlaw, Gov. John Hickenlooper\u2019s legal adviser, also testified and said the main reason Colorado had such troubles with medical marijuana is that it lacked the money to pay for inspectors.<\/p>\n
A tax on the ballot this November should ensure the state has enough money to police recreational pot, Finlaw said.<\/p>\n
Finlaw also had high praise for the integrity and entrepreneurial spirit of medical marijuana business owners, comparing them to wine makers and craft distillers in other states.<\/p>\n
\u201cThese are the same type of folks who have established medical marijuana dispensaries and grow operations in Colorado,\u201d Finlaw said.<\/p>\n